GOVT vs SPY
GOVT vs SPY
iShares US Treasury Bond ETF vs State Street SPDR S&P 500 ETF Trust
Quick Verdict
GOVT has a lower expense ratio. SPY delivered stronger 1-year returns. SPY offers more diversification with 503 holdings.
Side-by-Side Comparison
| Metric | GOVT | SPY | Winner |
|---|---|---|---|
| Expense Ratio | 0.05% | 0.09% | |
| AUM | $43.6B | $789.1B | |
| Dividend Yield | 3.57% | 1.01% | |
| Holdings | 216 | 505 | |
| YTD Return | -2.45% | +13.10% | |
| 1Y Return | -1.03% | +22.80% | |
| 3Y Return (annualized) | +2.40% | +20.98% | |
| 5Y Return (annualized) | -1.28% | +13.20% | |
| Volatility (annualized) | 4.5% | 15.3% | |
| Max Drawdown | -23.4% | -56.5% | |
| Fund Family | iShares by BlackRock (US) | State Street Investment Management | |
| Category | Fixed Income | Equity | |
| Inception | Feb 14, 2012 | Jan 22, 1993 |
GOVT vs SPY Performance
iShares US Treasury Bond ETF (GOVT) is a ETF from iShares by BlackRock (US) and State Street SPDR S&P 500 ETF Trust (SPY) is a ETF from State Street Investment Management. Over the past year GOVT returned -1.03% while SPY returned +22.80%. Year to date, GOVT is down 2.45% versus a gain of 13.10% for SPY.
Over three years, GOVT compounded at +2.40% per year against +20.98% for SPY; over five years the annualized figures are -1.28% and +13.20% respectively. Across the full 14-year window we track, SPY has the edge at +8.83% annualized vs +1.03%. Past performance does not guarantee future results.
Risk: Volatility and Drawdowns
SPY has been the more volatile fund, with annualized monthly volatility of 15.3% compared with 4.5% for GOVT. Lower volatility generally means a smoother ride, though it often comes with lower long-run returns.
The deepest peak-to-trough decline in our data was -23.4% for GOVT and -56.5% for SPY. Drawdown depth is worth weighing if you expect to sell during market stress rather than ride it out.
The two funds' monthly returns correlate at 0.09. They move independently enough that combining them can meaningfully diversify a portfolio.
Fees and Cost Over Time
GOVT charges 0.05% per year while SPY charges 0.09%. On a $10,000 position that is $5 vs $9 annually, a gap of $4 per year that compounds over a long holding period. On income, GOVT currently yields 3.57% against 1.01% for SPY.
Holdings Overlap
GOVT and SPY share 0 holdings out of 691 unique holdings combined, representing a 0.0% weight overlap.
Moderate overlap means holding both could provide meaningful diversification benefits.
Frequently Asked Questions
Which is cheaper, GOVT or SPY?
GOVT has an expense ratio of 0.05% while SPY charges 0.09%. GOVT is the cheaper option. On a $10,000 investment, that is $4 per year of difference.
Which performed better, GOVT or SPY?
Over the past year GOVT returned -1.03% vs +22.80% for SPY, so SPY leads on 1-year performance. Over the longest common window we track (14 years), GOVT annualized +1.03% vs +8.83% for SPY. Past performance does not guarantee future results.
Which is riskier, GOVT or SPY?
SPY has been the more volatile fund at 15.3% annualized versus 4.5% for GOVT. Worst drawdown: GOVT -23.4% vs SPY -56.5%.
Should I hold both GOVT and SPY?
GOVT and SPY have a monthly-return correlation of 0.09, so combining them can provide real diversification depending on your allocation goals.
What is the holdings overlap between GOVT and SPY?
GOVT and SPY share 0 common holdings with a 0.0% weight overlap. Combined, they hold 691 unique securities.
Which pays a higher dividend, GOVT or SPY?
GOVT yields 3.57% while SPY yields 1.01%, so GOVT currently pays the higher dividend yield.
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